Tax hikes likely for majority of Germans

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German taxpayers will have to brace themselves for higher rates to plug holes in the budgets of local authorities, according to research released on Wednesday.

A survey from consultants Ernst & Young shows that three-quarters of local authorities are set to raise taxes and increase charges for their services either this year or next year to make up for budget shortfalls.

They surveyed 300 local authorities, 37 percent of whom plan to save money by reducing or stopping services such as street lighting as well as those for children and the elderly.

Meanwhile 31 percent of town and city halls cannot afford to pay back debts.

A third of local authorities also wanted to raise fees for children centres, while 17 percent planned to increase cemetery charges. Last year a fifth of authorities raised property taxes and in the coming year 28 percent plan to follow suit.

Despite making savings in the last year, local authorities are planning further belt tightening. Some are even looking at closing swimming pools.

Ernst & Young said in the report: “Citizens will have to prepare for a new wave of tax and fee hikes.” Cash-strapped areas will reduce their services to the legal minimum, the report warned.

But according to the consultants one way to save money might be through local authorities sharing more services, while land and property they own could also be sold.

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